Jeff and I have been in many meetings where managers are haggling over how much to pay a MGO. Sometimes there is an enlightened manager at the table who realizes that this one employee could generate a substantial amount of revenue and therefore, she says: “we’d better pay him well.”
But more frequently the discourse is the opposite of this positive thinking. It’s all about how little they can be paid. Some pitiful amount is decided, and a search begins for the poor soul that will fill the job. It’s sad to hear this, actually, because a fully-functional and well-managed major gifts program will deliver the second-best return on investment in any non-profit. The first would be Planned Giving, a “sister” function to major gifts.
IF you lose a MGO, it will take you 4-6 months or more to secure a replacement. Then there is the training that needs to happen and the introduction to the donors and the organization. All of this takes a lot longer than you think. As all of this is happening, the caseload of the departed MGO gets colder and colder.
Yes, there are ways to keep the caseload warm, but those ways are only a stop-gap measure. The most important thing you can do when a MGO leaves your organization is get busy really fast on replacing her. And I mean really fast.
But as you are doing your reviews, if you discover that a well-performing MGO with a good attitude is in need of a little compensation boost, don’t get too stingy, because if you do and they leave, it will cost you a bundle.
We recently had a situation where a MGO left because he felt he was not being compensated fairly. He had a caseload that was delivering about $950,000 a year in value. The MGO left. It took six months to replace him. The MGO that came in was not as good as the departing MGO and the learning curve took forever. The result: I estimate the organization lost $200,000 to $300,000 that year. I believe this proportion of loss holds for even larger value caseloads.
Here’s my question: Was it worth it to lose this kind of money to save the $12,000 more the MGO had requested per year? I don’t think so. But this happens all the time – and it’s pretty tragic. I know there are rules and salary ranges an organization needs to consider, etc. etc. But an enlightened and courageous leader will lead in these situations, rather than mindlessly adhering to general rules.
Again, this applies to a MGO with good performance AND a good attitude. If you have a good-performing MGO with a bad attitude, I would not entertain any discussion on salary. A bad attitude is a virus you must get rid of regardless of the performance. Jeff and I have always made decisions about people (current or prospective) with attitude being the first thing we look for, and aptitude being the second. You can never get anywhere with a MGO that is gaming the system, gossiping, being destructive and entitled. It will not work.
So, if the good performing MGO with a good attitude is talking to you about compensation, please engage and honor her. It will be good for your relationship with the MGO and it will be good for your organization.
But compensation isn’t the only thing playing in the MGO retention agenda.
In an op-ed piece in the New York Times this year entitled “Why You Hate Work,” Tony Schwartz and Christine Porath talk about an employee satisfaction survey they did. I have reproduced some of their findings here, edited for space:
“Employees are vastly more satisfied and productive, it turns out, when four of their core needs are met: physical, through opportunities to regularly renew and recharge at work; emotional, by feeling valued and appreciated for their contributions; mental, when they have the opportunity to focus in an absorbed way on their most important tasks and define when and where they get their work done; and spiritual, by doing more of what they do best and enjoy most, and by feeling connected to a higher purpose at work.
The more effectively leaders and organizations support employees in meeting these core needs, the more likely the employees are to experience engagement, loyalty, job satisfaction and positive energy at work, and the lower their perceived levels of stress. When employees have one need met, compared with none, all of their performance variables improve. The more needs met, the more positive the impact.
A truly human-centered organization puts its people first — even above customers — because it recognizes that they are the key to creating long-term value. Costco, for example, pays its average worker $20.89 an hour, BusinessWeek reported last year, about 65 percent more than Walmart, which owns its biggest competitor, Sam’s Club. Over time, Costco’s huge investment in employees — including offering benefits to part-time workers — has proved to be a distinct advantage.
Costco’s employees generate nearly twice the sales of Sam’s Club employees. Costco has about 5 percent turnover among employees who stay at least a year, and the overall rate is far lower than that of Walmart. In turn, the reduced costs of recruiting and training new employees saves Costco several hundred million dollars a year. Between 2003 and 2013, Costco’s stock rose more than 200 percent, compared with about 50 percent for Walmart’s. What will prompt more companies to invest more in their employees?
In a numbers-driven world, the most compelling argument for change is the growing evidence that meeting the needs of employees fuels their productivity, loyalty and performance.
It also makes a big difference to explicitly reward leaders and managers who exhibit empathy, care and humility, and to hold them accountable for relying on anger or other demeaning emotions that may drive short-term results but also create a toxic climate of fear over time — with enormous costs. Also, as our study makes clear, employees are far more engaged when their work gives them an opportunity to make a positive difference in the world.”
Notice how important the non-compensation pieces are. It has to do with the workplace, how MGOs are treated, and how leaders and managers behave.
So if you are a manager of MGOs, take note on what you must do to keep your good-performing, good-attitude MGOs. Remember, a lot of it is about what you DO for THEM and who YOU are.
Richard
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April 4, 2014
An excerpt from 8-15-14 blog. I’m curious to know why you say “the first would be Planned Giving, a ‘sister’ function to major gifts?”
It’s sad to hear this, actually, because a fully-functional and well-managed major gifts program will deliver the second-best return on investment in any non-profit. The first would be Planned Giving, a “sister” function to major gifts.